Much of this shrinkage was due to a huge decline in energy imports and a big jump in energy exports. Bloomberg notes that this was the lowest petroleum deficit since August 2009.

From TD Securities' Millan Mulraine:

The main driver for the sharp improvement in the deficit was weaker import demand, as the pace of total imports declined 2.7% m/m in December. Domestic demand for imported goods were weaker across the board, with imports of industrial supplies (down 6.9% m/m) particularly weak, adding to the 3.7% m/m drop in auto imports. Petroleum imports were also lower, as both lower energy prices and imported volumes pushed the imported energy bill lower. Export activity, however, rose at a decent 2.1% m/m pace, driven mostly by the 9.6% m/m surge in export of industrial supplies.